A very political decision

The stonking election victory of Boris Johnson has refocused attention on who will be the next Governor of the Bank of england.

As with much else that the Government is doing – from today’s Queens Speech, the January 31 deadline for the Prime Minister’s Brexit deal and the February budget – this is an administration in a hurry.

All indications are that the choice of Mark Carney’s successor could come before Christmas. The selection of Governor is unusual. Independence and the right skillset are the most cherished qualities in central bankers.

But it is also a political appointment. Witness the way in which Brussels rushed Christine Lagarde out of the IMF to lead the european Central Bank. In so doing, it dashed the hopes of the German contender Theo Waigel because of fear among EU chieftains of his hard-line monetary views.

Political considerations accompany the appointment. Chancellor Sajid Javid and Boris Johnson will need to be at one. The mantra of the Government is ‘get Brexit done’ and it is hard to imagine installing someone who wavers from the script.

Such shortlists that have been drawn up are the work of Treasury mandarins. Who is to say that they won’t be bypassed? George Osborne went outside when he chose Carney as the person most likely to keep the City safe after the banking crisis because of the Canadian’s experience as chairman of the global Financial Stability Board.

Mrs Thatcher plucked Robin Leigh-Pemberton from relative obscurity because she liked his gentlemanly style and the fact that he was not the Square Mile’s favourite.

The most-mentioned candidate since the election has been the director of the LSe, Minouche Shafik.

She is seen as having a shining CV which includes stints at the IMF, the World Bank and the Bank of england. She is also favoured candidate of the chairman of the

Bank of england’s Court, Bradley Fried. But questions are being asked as to whether Shafik believes in Brexit, or has been converted to the cause.

A similar cloud hangs over the well-qualified chairman of Santander Shriti Vadera, because of her role as an advocate of the Customs Union after the referendum. Where all that leaves us is obscure.

But forgotten contenders such as that as former Johnson economic adviser Gerard Lyons should not, even at this late stage, be ruled out.

Called to account

AUDIT may never be the same again if Donald Brydon has his way.

The former stock exchange boss has provided a blueprint for a far-reaching audit shake-up which is likely to give the accounting profession kittens.

To put an end to conflicts of interest and for a laser focus on FTSe 350 firms, he proposes a corporate audit profession.

The old test of a ‘true and fair’ view would be kicked out, ending the pretence that company accounts are free of the kind of mis-statements seen at Carillion, Thomas Cook and countless others.

Instead of a flat judgement, Brydon wants a more layered approach. There should be better continuity and transparency between successive reports. An effort should be made to inform shareholders of inconsistencies in the way the accounts have been presented and to point to negative signals such as debt build-up, shrinking cashflow and the like.

As critically, Brydon rightly recognises the obligation of companies to act in the broader public interest.

If such a test existed, Persimmon might never have built houses with a serious fire risk, and Whirlpool (had it been audited in the UK) might have been put out of business. And we would not have had to wait for a Commons probe to learn of unacceptable practices at Sports Direct’s warehouse in Shirebrook, Derbyshire.

Last chapter

Pearson was once Britain’s ultimate vanity company, owning everything from Madame Tussauds to a chunk of merchant bankers Lazard.

With the sale of its last 25pc stake in Penguin Random house for a cool £530m it is left with a rump of what it called digital learning services.

John Fallon, architect of recent sell-offs, including the FT newspaper, is heading off.

his successor will be much more dependent on the budgetary whims of US states.

Kindness of strangers is a tough gig.